Direct labor are not part of overhead costs and shown separately while indirect labor are part of overhead costs and included in overhead cost because those labor cannot be allocated separately or identifiable separately.
Indirect costs(salaries, materials not directly involved in manufacturing), period costs(selling and admin costs)
It is done so to keep control on costs as direct costs are controllable while indirect costs are not.
Answer this question...why do managers cosider direct costs to be more accurate than indirect costs?
Direct cost are those costs which varies directly with variation in volume of products units like direct labor or direct material while indirect cost has not direct connection with volume of units of products like depreciation building rent supervisors salary etc.
Prime cost = direct materials + direct laborwhile conversion cost = direct labor + factory overhead( which includes indirect materials, indirect labor and other indirect costs
Direct labor are not part of overhead costs and shown separately while indirect labor are part of overhead costs and included in overhead cost because those labor cannot be allocated separately or identifiable separately.
prime costs only includes direct cost like direct material and direct labor.
Indirect costs(salaries, materials not directly involved in manufacturing), period costs(selling and admin costs)
It is done so to keep control on costs as direct costs are controllable while indirect costs are not.
No direct costs and indirect costs are not same and opposite of each other.
Answer this question...why do managers cosider direct costs to be more accurate than indirect costs?
Direct cost are those costs which varies directly with variation in volume of products units like direct labor or direct material while indirect cost has not direct connection with volume of units of products like depreciation building rent supervisors salary etc.
Manufacturing Cost: There are three major component of manufacturing cost.Such as : DIRECT Material: those material s that become an integral part of the product and that can be conveniently traced directly to it. Direct Labor:- those labor costs that can be easily traced to individual units of product. Manufacturing Overhead: Manufacturing costs that can not be traced directly to specific unit product.Example indirect materials,indirect labor. Indirect Labor: Wages paid to employees who are not directly involved in production:work. Example:-maintenance worker janitors and security grads. Indirect Materials: Materials used to support the production process. Example:- Lubricants and clearing supplies used in the automobile assembly plant.
Define direct and indirect labour?"
Indirect labor is part of overhead costs and included in total product cost.
They are direct costs.